Lawsuits Against Wells Fargo Keep on Coming
Royal Park Investments, based in Brussels, filed a class action suit in Manhattan federal court alleging the bank used investors’ money to cover some of its legal fees, Reuters reports. Wells Fargo allegedly took the funds from two residential mortgage-backed securities trusts, according to the newswire. Royal Park claims hundreds of investors were affected as a result and is seeking damages for them, Reuters writes.
Separately, two former managers are suing the retail bank for what they claim were retaliatory dismissals and seeking damages of at least $50 million, according to the Wall Street Journal. Husband and wife Reza and Marla Razzaghipour say they brought their concerns about the bank’s aggressive sales practices, which allegedly included falsification of records, to senior managers as early as 2013, according to the paper. But the bank then allegedly fired them in retaliation in March from their positions managing about 3,500 employees in several southern California regions, according to the suit cited by the Journal.
A spokesman for Wells Fargo tells the paper in a statement the bank denies the allegations and the Razzaghipours were let go for legitimate reasons. Meanwhile, current and former employees tell the Journal that the Razzaghipours coerced them into the same practices mentioned in the suit. A lawyer for the couple didn’t comment to the paper on the allegations by the employees.
Wells Fargo paid a $185 million fine last year following revelations that thousands of its employees opened as many as two million fake accounts without client authorization. Last week, the bank said the actual figure was around 3.5 million — and that figure doesn’t cover transactions before 2009, even though the first instances of the practice apparently go back at least to 2002.
Wells Fargo faces a number of other lawsuits as well, alleging activities such as hiking refinancing and merchant account fees and, at one branch, sexual harassment.